trends in public procurement in africa:...
TRANSCRIPT
Trends in Public Procurement in Africa: Opportunities and Challenges
of Capacity Building Interventions
Thomas AsareAbdoulaye KaneFrannie LeautierSithabile Majoni
Why focus on public procurement?• It is the principal means of organizing spending of public resources for delivery of
goods and services
• Public procurement depends on a number of critical processes which need to function seamlessly for effective results
– Demand assessment to identify needs for goods and services
– Budgeting and prioritizing actions to allocate resources towards critical needs
– Awarding, supervision, and management of contracts to get goods and services delivered
– Regulating the quality of delivered goods and services and enforcing contracts
• Sub-Saharan African countries have consistently under performed other regions in most of these areas, despite their importance for development results
• Financial crisis in 2008-2009 is putting pressure on availability of resources (Aid, FDI, Remittances) and countries have tor rely even more on domestic resources
• With limited domestic resources it is even more critical that they are spent efficiently and effectively
• A transparent and efficient procurement system will not only aid in generating savings that can be reinvested in development, but can affect the business environment and the credibility and confidence of the citizen in public services
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Status of E-Procurement in Africa• Africa has had challenges in implementing e-government with
many projects being partial or total failures• Failures have been attributed to three major factors:
– state agencies have been slow in putting in place the needed capacities;
– lack of ICT infrastructure and mass connectivity to the Internet have hampered much of the expected roll-out; and
– antiquated administrative cultures have dominated the under-resourced and unaccountable bureaucracies
• Delays in implementation of e-government have led to a slow take-off on e-procurement
• Africa needs to address major weaknesses in the area of public procurement in addition to putting in place the critical capacities for successful e-procurement
• Successes in using ICT to solve other problems such as in banking, health, and education on the Continent bear well for the future of e-government and e-procurement
3
Status of e-Government in Africa
Presence of Central Government Internet Portals
38.6%
52.3%
9.1%
Share (%)
None
At least One
More than One
Presence of Government Websites for Consulates and Embassies
11.4%
47.7%
40.9%
Share (%)
None
At least Two
More than Two
Source: Own analysis with data from eRepublic.org 4
Weaknesses in procurement systems in Africa• Legal frameworks: for public procurement lack clarity, are not
comprehensive, and many are outdated• Transparency & disclosure: no systematic disclosure of information
on procurement award and performance, little transparency and streamlining of disclosure mechanisms
• Accountability & anti-corruption: non compliance in implementing procurement rules, few countries with anticorruption and conflict of interest provisions in place, and limited consultation of public before contract award
• Separation of functions: central procurement authorities involved in operational activities with no separation of function between initiating, authorizing, approving supervising and controlling
• Standards of conduct: Prevalent conflicts of interest by officials working in central procurement units and procurement carried out with little compliance with the required standards of conduct
• Skills and capabilities: lack of a cadre of skilled professionals in public procurement
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Indicators of the environment for public procurement
Quality of Public Administration
Business Regulatory Environment
Transparency, Accountability & Corruption in the Public Sector
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2.5
2.6
2.7
2.8
2.9
3
3.1
Transparency & Accountability
Public Adminstration Regulatory Environment
2005 2006 2007 2008
Scale: 1= Lowest 6= Highest
Status of Key Drivers in Environment for Public Procurement in Africa: Average Regional Ratings
Source: IDA Resource Allocation Index 7
Average Regional Ratings Hide a lot of Variability Across Countries
Decline
Flat
Improve
0.00%10.00%20.00%30.00%40.00%50.00%60.00%70.00%80.00%
Source: IDA Resource Allocation Index 8
Transparency, Accountability, and Corruption: Trends from 2005-2009
Cote d’Ivoire, Ghana
Angola, Benin, Cameroon, Cape Verde, CAR, Chad, Comoros, DRC, Congo, Djibouti, Ethiopia, Gambia, GuineaBissau, Kenya, Lesotho, Madagascar, Malawi, Mali, Mozambique, Niger, Nigeria, Sao Tome & Principe, Senegal, Sierra Leone, Sudan, Togo, Uganda, Zambia
Burkina Faso, Burundi, Eritrea, Guinea, Mauritania, Rwanda, Tanzania, Zimbabwe
Improve
Flat
Decline
Source: IDA Resource Allocation Index 9
Quality of Public Administration:Trends from 2005-2009
CAR, Kenya, Mozambique, Nigeria
Angola, Benin, Burundi, Cameroon, Cape Verde, Comoros, Congo, Cote d’Ivoire, Djibouti, Eritrea, Ethiopia, Gambia, Ghana, Guinea, Guinea-Bissau, Lesotho, Madagascar, Malawi, Mali, Mauritius, Niger, Rwanda, Sao Tome & Principe, Senegal, Sudan, Tanzania, Togo, Uganda, Zambia
Chad, DRC, Zimbabwe
Improve
Flat
Decline
Source: IDA Resource Allocation Index 10
Business Regulatory Environment:Trends from 2005-2009
Burkina Faso, Djibouti, Gambia, Senegal, Sierra Leone, Zambia
Angola, Burundi, CAR, Comoros, Congo, Cote d’Ivoire, Eritrea, Ethiopia, Ghana, Guinea, Kenya Lesotho, Malawi, Mali, Mauritania, Mozambique, Nigeria, Rwanda, Sao Tome & Principe, Sudan, Togo, Uganda
Benin, Cameroon, Cape Verde, Chad, DRC, Guinea-Bissau, Madagascar, Niger, Zimbabwe
Improve
Flat
Decline
Source: IDA Resource Allocation Index 11
Challenges to be addressed• Insufficient skilled professionals• Lack of strategic treatment of procurement• Few systematic approaches to procurement• Corruption in public procurement• Inadequacy of accountability and control
mechanisms• Changes in the institutional environment• Commitment to change all dimensions• Involvement of all stakeholders to create
ownership for reforms
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Reforms needed in Africa• Legislative framework:
– Compliance with applicable obligations from national and international standards
– Regulations, documentation, and tools to support implementation
• Institutional framework and management capacity:– Mainstreaming and integration into the public financial management system– Creating a functional management or regulatory body– Strengthening the institutional development capacity
• Procurement operations and market practices– Enhancing the efficiency of procurement operations and practices– Functionality of the public procurement market and implanting necessary
changes– Putting in place contract administration and dispute resolution provisions
• Integrity of the procurement system:– Establishing and enhancing control and audit system– Putting in place an efficient appeals mechanism– Increasing access to information,– Introducing ethics and anticorruption measures
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Capacity building approaches in procurement
• Definition: OECD (2002) definition of capacity, which is “the process whereby people, organizations and society as a whole unleash, strengthen, create, adapt and maintain capacity over time.”
• Any approach to capacity development for procurement reforms needs to take into account:
– Political environment
– Implementation capacity
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Reforms through selective pilots that are monitored and scaled-up
when successful, working with champions who can get things
done while building broad-based support
Planned comprehensive approaches with fixed targets and
scheduled activities that are monitored and adjusted over
time across a wide range of areas
Incremental change of existing practices , working with selected
champions, building-in maximum adaptability and flexibility to support emerging centers of
excellence and resolve
Working with a broad range of areas for reform but seeking
incremental change while building M&E capacity, using guidelines rather than fixed
targets
ApproachUnfavorable Favorable
HI
LO
Political Environment
Imp
lem
enta
tio
n C
apac
ity
Approaching Capacity Development in Varying Contexts
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Burkina Faso
Madagascar
Malawi
Rwanda
Tanzania
Cape Verde
Ghana
Kenya
Senegal
Angola, Burundi, CAR
Chad, Comoros, DRC, Congo
Cote d’Ivoire, Eritrea, Guinea-Bissau
Sierra Leone, Sudan, Togo
Zimbabwe
Benin
Djibouti
Uganda
Cameroon, Ethiopia, Gambia,
Lesotho, Mali, Mauritania, Mozambique, Niger,
Nigeria, Sao Tome & Principe, Zambia
Unfavorable Favorable
HI
LO
Regulatory Environment
Imp
lem
enta
tio
n C
apac
ity
Varying Contexts: Regulation Vs. Implementation
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Capacity to Enforce Contracts
Country Procedures (#) Time (Days) Cost (% claim) Rank
Tanzania 38 462 14.3 31
Rwanda 24 260 78.7 40
Ghana 36 487 23.0 47
Zimbabwe 38 410 32.0 78
South Africa 30 600 33.2 85
Benin 42 825 64.7 177
Source: World Bank Doing Business Indicators (2010)
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Very Well
Very Badly0.00%
20.00%
40.00%
60.00%
80.00%
How well is the government handling fighting corruption?
Source: Afrobarometer (2005)
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Burkina Faso
Kenya
Malawi
Senegal
Tanzania
Cape Verde
Ghana
Madagascar
Rwanda
Burundi, Chad, Comoros,
DRC, Congo, Cote d’Ivoire,
Gambia, Guinea, Sudan,
Togo, Zimbabwe
Benin
Lesotho
Mali
Sao Tome & Principe
Angola, Cameroon, CAR
Djibouti, Ethiopia, Guinea-Bissau, Mozambique, Niger,
Nigeria, Mauritania, Sierra Leone,
Uganda, Zambia
LO HI
HI
LO
Transparency & Accountability, Corruption
Imp
lem
enta
tio
n C
apac
ity
Transparency & Accountability Vs. Implementation
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Dealing with Construction Permits
Country Procedures (#) Time (Days) Cost (% income per capita)
Rank
South Africa 17 174 24.5 52
Rwanda 14 210 456.1 89
Benin 15 410 303.6 132
Ghana 18 220 1,099.0 153
Tanzania 22 328 3,281.3 178
Zimbabwe 19 1426 24,468.30 178
Source: World Bank Doing Business Indicators
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Case of Ghana
What works
•Overall environment for public procurement above average
•Robust Legislative and Regulatory framework, further improvement establishment of National Public Procurement Board and tender committees
What doesn’t
•Knowledge about new procurement framework by MDAs and private sector
•Limited specialized audits of procurement performance
• Inadequate public awareness of e of complaints and transparency unit
Recommendations
• Implant web-based procurement planning tool
•Build up sustainable procurement training programs within local training institutions
•Strengthen procurement expertise among audit institutions
•Strengthen private capacity to successfully compete for government contracts
Source: World Bank (2007). External Review of Public Sector Financial Management.21
ACBF’s Experience: Focus areas
• Human capacity: skills, behaviors, motivation attitudes
• Organizational capacity: information systems and logistical capacities, monitoring and supervisory capabilities
• Institutional capacity: integration of public procurement in other systems, strengthening oversight functions, and focusing on inclusion and dialogue mechanisms
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Procurement by Grantees of ACBF by Category in 2008 (in US$)
Recruitment of Experts
Consultancy
Capital
Audit & Professional Services
US$ 413 million of procurement since 1991, mostly in services.
23
ACBF’s Experience: Human Capacity
• What: Skills building programs in areas such as drafting and updating procurement regulations; building awareness and sensitizing stakeholders against corruption; conducting competency-based and advanced training courses in use of procurement information system and understanding of good governance in public procurement
• Who: public procurement professionals, staff of national civil services, local government, oversight institutions, private sector, civil society
• How: Deep skills building as in the Ghana Institute of Management and Public Administration (GIMPA) project; on-the-job training as in the WAEMU project
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• Transparency and Accountability: information systems that publish information on public contracts, procedures, appeals and information on the conditions for lodging appeals
• Efficiency and effectiveness: online procurement with incremental investments in upgrading the Public Procurement Information Systems and building the capacity of users and managers of the public procurement information systems.
• Monitoring and supervision: strengthening monitoring and supervisory bodies to carry out oversight roles; inclusion of experts representing the various stakeholders (public sector, private sector, and civil society); regulatory compliance; tracking progress in implementing reforms; and ensuring functioning of non-judicial appeals mechanism for bidders
• Logistical capabilities: strengthening the logistical capacities of procurement institutions to handle diverse information systems, contract processing mechanisms, and information and publication roles and functions
• Example: financing purchase of equipment and installation of a technology platform as in the WAEMU project
ACBF’s Experience: Organizational Capacity
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• Coherence: integration of public procurement into budget management by investing in computerized budget management system and training of the users and revision of public procurement procedures manual
• Oversight: strengthening oversight functions of Parliament, civil society watchdogs, and the professionalizing voices of the private sector and civil society
• Example: building capabilities for coherence in sub-regional policies as in WAEMU project; common platform for procurement and disbursement for all project directors of entities funded with ACBF grants
ACBF’s Experience: Institutional Capacity
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ACBF’s Own Procurement from 1998-2008 (in US$ )
-
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
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ACBF’s Own Procurement by Category in 2008 (in US$ )
Recruitment of Expertise
Consultancy
Procurement of Goods (Fixed Assets and Inventory)
Travel
28
Case of Zimbabwe
What works
• Overall environment for public procurement enhanced by Regional Competition
• Robust regional sourcing techniques work well in the face of severe scarcity of goods, shortage of foreign exchange and hyperinflation
What doesn’t
• Need for rigor and scrutiny to avoid local hoarding and price gouging
• Rules of competition and excessive monitoring can lead to non-procurement
Recommendations
• Implant search tool to uncover regional opportunities for procurement
• Build up sustainable procurement training programs across a sub-region
• Strengthen procurement expertise among regional audit institutions
• Strengthen private capacity for regional procurement
Source: World Bank (2007). External Review of Public Sector Financial Management.29
Conclusions and way forward• Public entities in Africa spend large sums on public procurement• Budget constraints make it imperative to introduce efficient public
procurement procedures and systems to ensure value for money• There is a need for efficient, transparent, accountable and
professionally managed public sector procurement systems which enjoy high level of business confidence and ensure consistent attainment of best value for money
• Whilst most African Countries have enacted legislation to better manage public procurement, there is still the need for genuine political commitment in enforcement and compliance
• Eradicating institutionalized corruption from public procurement takes time but requires swift behavioral change
• Public access to procurement information is important in promoting transparency and as a key tool for anti-corruption; e-government initiatives could be instrumental in that regard
• Procurement reforms in Africa need to encompass the use of technology in managing procurement processes
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